Vartan Oskanian, former Foreign Minister of Armenia and a prominent member of the Prosperous Armenia Party (BHK) has been placed under criminal investigation by the National Security Service of Armenia (NSS) on allegations of money laundering and tax evasion at the Civilitas Foundation, a think tank he founded and led from 2008 until this past February when he declared his intent to re-enter politics. Oskanian has declared that the allegations are politically motivated.

According to a statement he issued on June 11, Oskanian said he finds “it strange and astonishing that my work and the work of Civilitas can in any way be linked to money laundering or illegally acquired funds.” “Even more astonishing,” he continued, “is that such a question is being raised at a time when I have entered politics.” He added, “it is obvious to me that the criminal case that has been opened is politically motivated.”

The American Ambassador to Armenia, John Heffern also expressed his concerns. Ambassador Heffern told Radio Free Europe that more than anything “the timing of [the investigation] is troubling. The fact that this would happen at this time in the political calendar is troubling.”

The investigation was initiated on May 25th, less than three weeks after the 6 May Parliamentary Elections in Armenia. Since his re-emergence on the political scene in February, Oskanian has been a vocal critic of the ruling coalition led by the Republican Party of Armenia (HHK), particularly the HHKs conduct in the recent parliamentary elections. Moreover, it is believed that the former Foreign Minister was instrumental in the decision of the BHK not to continue the coalition with the HHK and to drop support for the current Armenian president, Serge Sargisian, in the upcoming Presidential elections. This has led some political observers in Armenia to speculate that these moves might be representative of Oskanian’s or of other BHK leaders desire to challenge Sargisian in the upcoming Presidential elections.

The criminal investigation arises from a $2 million donation received by the Civilitas Foundation from two American corporations, Polymer Material and Huntsman International. The donation was made as a result of the proceeds from the sale of their Armenian subsidiary, Huntsman Building Products. According to an NSS statement, Civilitas failed to report the donation to tax authorities last year. The statement also claims that $1,135,000 was transferred directly to the bank accounts of Oskanian and Tigran Karapetian, a member of the Civilitas Board of Trustees. While Oskanian has conceded that this donation was not reported to the tax authorities, he maintains that the process was transparent.

In a statement issued on June 12, Oskanian noted that, “In this case, the source of the funds are known, the buyer is known, the transfer of the funds to me and to Civilitas according to the donor’s wishes have been transparent and electronic. The attorneys have said that no tax obligation was created as a result of the transaction.”

The Civilitas Foundation, which receives support from the governments of the Netherlands, Portugal, Norway, Germany, Switzerland, the United Kingdom, the United States, and the OSCE, has maintained that its activities have always been and remain transparent. Salpi Ghazarian, director of the Civilitas Foundation, informed the Ambassadors of Britain, France, Germany, Italy, Switzerland and Romania in Yerevan on Thursday that not only had the authorities launched the probe to pressure Oskanian but they have also launched an investigation of CivilNet Online TV. This on-line broadcast produced by Civilitas is aimed at promoting civil engagement amongst Armenian youth. Civilitas, according to its website, aims to foster prosperous democracy and full civic participation for all in Armenia as well as to contribute to the peace process in the Caucasus region.

Ambassador Heffern told Radio Free Europe that, “Civilitas is a very important partner for us, and we think it’s really important for Armenia politically and for the media.” Both Oskanian and Ghazarian have been summoned for interrogation regarding the investigation. While Oskanian has already testified once, both have decided to refuse to testify this week citing that while they thought they were being invited to testify as witnesses, they are in fact being asked to testify as suspects.

Both the leader of the BHK, Gagik Tsarukian as well as Levon Zurabian, a prominent figure of the opposition party Armenian National Congress (HAK), have come out in support of Oskanian and the Civilitas Foundation. Zurabian argued that, “If we lived in a democratic state this would be seen as a normal process.” He continued that while lawenforcement agencies certainly have the right to investigate the sources of NGO funding he cautioned that politically motivated prosecutions have occurred in Armenia and cannot be ruled out as a motivation in this particular occasion.

The government, for its part, has remained firm in maintaining that the investigation is neutral and not politically motivated.

Prepared by Karina Gould for CEW with additional reporting from Radio Free Europe and the Armenian Press.